That could amount to 7000 jobs lost as Microsoft currently employs over 200,000 fulltime workers with around 55% of those based in the US.
In a statement the company said, “We continue to implement organisational changes necessary to best position the company for success in a dynamic marketplace.”
The cuts are significant and are the biggest since it laid off 10,000 workers in 2023.
The losses though come at a time when the company has been reporting a streak of pretty good results – with sales and profits ahead of expectations, despite the economic and political turbulence associated with the Trump administration.
The job losses are part of the company’s efforts to build ‘high-performing teams’ and to reduce the layers of management at the company with fewer managers.
The decision is part of the company’s efforts to cut costs will diverting funds into artificial intelligence which it sees as a major growth engine. It’s investment in AI has impacted the company’s profitability and it has allocated a whopping $80bn in capital spending this year to support those ambitions.
According to one analyst if Microsoft maintains that level of investment it might need to cut the number of jobs at the business by as much as 10,000 going forward.
Microsoft is not alone. Google has also laid off hundreds of employees over the past year, as it looks to prioritise AI and cut costs.
